C3.ai Inc. experienced a surge in its share price during extended trading on Wednesday following the release of its fiscal third-quarter earnings report, which surpassed analysts’ expectations. The enterprise artificial-intelligence software company reported a net loss of $73 million, or 60 cents per share, compared to a loss of $63.2 million, or 57 cents per share, in the same period last year. However, on an adjusted basis, C3.ai’s loss narrowed to 13 cents per share, significantly beating analysts’ estimates of a 28-cent loss per share.
Revenue for the quarter came in at $78.4 million, up from $66.7 million in the previous year, exceeding analysts’ projections of $76.1 million. Notably, the company’s growth rate accelerated to 18% from 17% in the fiscal second quarter.
During the earnings call, Chief Executive Tom Siebel expressed optimism about the enterprise AI market, describing it as “on fire” and highlighting the company’s accurate predictions regarding its size. Siebel emphasized the overwhelming demand for C3.ai’s offerings, reflecting the increasing adoption of AI solutions across various industries.
C3.ai also highlighted its diversification across industries, with 29% of bookings coming from state and local governments and 25% from federal, defense, and aerospace customers. Additionally, the company closed 50 agreements, including 29 new pilots, in the most recent quarter, indicating strong momentum in customer acquisition and adoption of its AI solutions.
C3.ai’s CEO, Tom Siebel, also noted during the earnings call that the company’s transition to a consumption-based pricing model six months ago has been highly successful. He highlighted that this new pricing approach has significantly reduced the price barrier for companies to engage with C3.ai, resulting in increased customer engagement and adoption of its AI solutions.
Following the positive earnings report and Siebel’s comments on the pricing model, C3.ai’s shares surged approximately 13% in Wednesday’s after-hours trading session, reflecting investors’ optimism about the company’s future prospects.
Looking ahead to the fiscal fourth quarter, C3.ai provided revenue guidance in the range of $82 million to $86 million. This guidance was slightly below the FactSet consensus estimate of $83.9 million, but investors seemed encouraged by the overall performance and outlook of the company, driving the share price higher in after-hours trading.